Core view
New houses: the market decline remains the same; The sales of new houses in low-energy cities are significantly under pressure. The transaction area of new houses in 46 cities was 18.404 million square meters, a month on month decrease of 26.7% and a year-on-year decrease of 35.7%. 1、 The month on month growth rates of the second and third tier cities were – 18.5%, – 23.3% and – 15.0% respectively, and the year-on-year growth rates were – 30.3%, – 6.7% and – 69.9% respectively. The first tier cities decreased month on month, with a year-on-year decrease of 9.7pct; The degree of second-line callback has expanded. On the one hand, as the Spring Festival holiday approaches, many real estate enterprises slow down the supply rhythm, and the supply downturn has led to a sharp decline in transactions to a certain extent; On the other hand, since the second half of last year, the downward pressure on the market has intensified, and the wait-and-see mood of home buyers has become more and more intense. It is predicted that next month, we believe that it coincides with the traditional holiday of the Spring Festival. In addition, under the influence of covid-19 epidemic, we advocate the local Chinese new year, and the enthusiasm for returning home is weak. The third and fourth tier cities will continue to be under pressure.
Second hand housing: the transaction scale decreased month on month and expanded year-on-year, mainly due to the slight decline in transaction driven by the contraction of market supply near the Spring Festival. The transaction area of second-hand houses in 16 cities was 4.782 million square meters, down 14.4% month on month and 39.4% year-on-year. 1、 The month on month growth rates of the second and third tier cities were – 20.7%, – 9.3% and – 11.1% respectively, and the year-on-year growth rates were – 42.3%, – 26.6% and – 67.0% respectively. Most of the 12 cities in the city showed varying degrees of month on month decline, with only Hangzhou and Suzhou picking up month on month; On a year-on-year basis, most of the 12 cities fell, and only Chengdu rebounded year-on-year. We believe that, based on the recent frequent emergence of real estate supporting policies, many cities have successively relaxed credit policies, increased mortgage lending, decreased mortgage interest rates in some areas, and faster lending speed, adding that there is still room for the current market scale compared with the same period last year, and it is expected that the second-hand housing market will gradually realize a stable, medium and small recovery.
Inventory and decontamination: the overall inventory decreased on a month on month basis, and the decontamination cycle increased on a month on month basis; Only in Shanghai, the decontamination cycle is less than 6 months. As of January 31, the inventory area of new houses in 14 cities was 103.47 million square meters, with a month on month ratio of – 1.5% and a year-on-year ratio of – 2.2%; 11.4 months, with a month on month increase of + 1.1% and a year-on-year increase of + 22.8%. 1、 The month on month growth rates of inventory area in the second and third tier cities were – 4.8%, – 0.7% and – 0.8% respectively, and the year-on-year growth rates were + 0.6%, – 9.7% and + 9.6% respectively; The decontamination cycle is 8.5 months, 10.3 months and 13.7 months respectively, with month on month growth rates of – 4.5%, – 0.2% and + 7.8% respectively, and year-on-year growth rates of + 25.9%, – 13.9% and + 58.2% respectively
Sales of real estate enterprises: the equity caliber of the top 100 real estate enterprises in January 2022 was 410.6 billion yuan, a year-on-year increase of – 42.3% (previous value – 38.1%). Only Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Huafa Industrial Co.Ltd.Zhuhai(600325) and Renheng land had positive monthly sales growth in January, and the monthly sales of the other top 20 real estate enterprises fell by different ranges year-on-year. In January, the overall real estate market continued the cooling trend since the second half of last year. The sales performance of most large-scale real estate enterprises was poor, and the monthly sales decreased significantly year-on-year and compared with the average level of last year. Looking forward to February, affected by the Spring Festival holiday and the disturbance of the epidemic, the real estate market is still difficult to be optimistic, and the transaction may continue to decline. Land market: 1) the volume of land transactions decreased significantly, with the construction area of land transactions in 100 cities – 76.3% year-on-year. Due to the cold land market and the lack of centralized land auction, there were no residential land transactions in the first tier cities this month; The overall average floor price of Baicheng land transaction is – 49.3% year-on-year. 2) the heat of the land market is still low, and the land premium rate of Baicheng this month is only 1.0%.
Investment advice
We insist that “the first quarter is a better allocation window period”, and it is suggested to increase the proportion of real estate allocation at this stage. At present, the fundamentals are still downward. Sales have continued to bottom since the beginning of the year, and the downward range of sales has deepened during the Spring Festival; Affected by weak sales and continuous downward investment, the GDP of the real estate industry in the fourth quarter was – 2.9%, which was 1.3 percentage points higher than that in the third quarter. The loose policies of the real estate industry were introduced in the window period of the first quarter, which can better support the core goal of “steady growth”. At the same time, considering that the debt repayment pressure of private real estate enterprises is mainly concentrated in the first half of this year, it is expected that more effective capital side policies will be implemented in the first quarter, and the industry beta market trend will continue to rise. We suggest paying attention to three main lines: 1) leading real estate enterprises with low credit risk, smooth financing channels and high security: Poly Developments And Holdings Group Co.Ltd(600048) , Gemdale Corporation(600383) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Vanke Co.Ltd(000002) , Longhu group and China Resources Land. 2) Under the influence of macro and industrial policies such as interest rate reduction, elastic real estate enterprises with large marginal income: Xuhui holding group, rongchuang China, Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) . 3) At present, the real estate post cycle property sector with strong income determination, accelerated concentration, recent credit risk mitigation of related real estate enterprises and elastic reversal: Country Garden service, Xuhui Yongsheng life and xinchengyue service.
Risk tips
Real estate regulation continues to upgrade; Sales fell more than expected; Financing continued to tighten.
